US Agencies Vow to Do Better After Wasting $1.2 Trillion in Improper Payments

Alice Salles Comments

Like death, government inefficiency and waste are some of the constants in life. We see it at the Department of Motor Vehicles (DMV), at the post office, and in the news — every single day. Unfortunately, few of us question why and even fewer dare to speak out against it. Still, confidence in government remains low, and trust in government officials even lower.

Now, a report from Forbes is helping to better illustrate just how widespread the waste is.

To some of us, the dollar amount attached to the waste may help clarify for once and for all that, no matter how many laws are passed or how many Congress committees are tasked with oversight, government will always be inept.

improper payments waste government inefficiency

For the past 15 years, government wasted $1.2 trillion of taxpayer dollars in improper payments. The waste is not only associated with one particular agency and it amounts to more than one-quarter of President Trump’s 2020 budget. Despite the incredibly high number, agencies claim they are doing their best to “aggressively” fix this problem.

The problem is: can they?

In 2018 alone, federal agencies shelled out $140 billion in improper payments. Meaning that an average of $12 billion per month was sent to the wrong people, for the wrong reason.

Agencies to blame for most of the waste include the Department of Health and Human Services (HHS), the Internal Revenue Service (IRS),  Social Security Administration (SSA), and the departments of Defense (DOD), Labor (DOL), and Education (ED).

According to the report, a lack of simple financial control mechanisms is keeping federal agencies from better managing payments. Even after President Obama’s signature healthcare law was passed, the HHS still failed to investigate fraud and put an end to it, especially within the Medicare and Medicaid programs. In the end, improper payments within both programs went from $64 billion in 2012 to $85 billion today. But not all is healthcare-related.

Some of the waste is rooted in sheer cronyism, with government overpaying $242 million on crop subsidies to farmers for instance. Others are clearly the work of inept bureaucrats, with dead people receiving $1 billion in benefits.

Even the ED overpaid college students by nearly $6 billion in loans.

With the student debt crisis in full swing, one would think the department would be better at keeping track of these subsidies.

Government Will Always Be Inept

While Forbes claims that this type of waste further erodes our trust in government — especially because many Americans feel that certain agencies lack proper funding — reports of inefficiencies are scandalous not because they happen but because we allow government to expand in spite of the bureaucracy’s ineptitude.

After all, it is in the nature of government to be inept. And unless we truly care about our hard-earned money, we will never completely see the government for what it is: an institution with the sole purpose of keeping a tight grip on the “monopoly of the use of force and violence,” as Austrian economist Murray Rothbard put it. And the only way it maintains itself is by coercion, as nobody would willingly financially support an inept organization by voluntary means.

Waste happens and is a feature of the state precisely because it is not in bureaucrats’ best interest to save money. After all, they are using someone else’s cash, and they have no incentives to do a better job as they have zero competition.

So while it feels good to urge others to pressure the government to “do better,” the reality is that it never will. Unless, of course, real decentralization happens.

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